Cisco Systems, Inc.: Implementing ERPPete Solvik, Cisco Systems chief information officer (CIO), considered the last remaining line item of his ERP (Enterprise Resource Planning) implementation budget. Cisco had a history of rewarding performance with cash bonuses, but the amount allocated for rewarding the ERP team, over $200,000, was unprecedented. To be sure, they had delivered a lot in a time frame that no one had believed possible. It had not been easy either. The team members, Solvik included, had taken a risk in joining the project. Rewards should, and would, be generous. The size of the bonus pool, though, made Solvik think: they had done well, but how well? What had gone right? What had gone wrong? Given another project of this magnitude and risk, would they be able to do it again?

History of CiscoCisco Systems, Inc. was founded by two Stanford computer scientists in 1984 and became publicly traded in 1990. The company’s primary product is the “router,” the combination of hardware and software that acts as a traffic cop on the complex TCP/IP1 networks that make up the Internet (as well as corporate “Intranets”). With the rise of Internet technologies, demand for Cisco’s products boomed and the company soon began to dominate its markets. By 1997, its first year on the Fortune 500, Cisco ranked among the top five companies in return on revenues and return on assets. (See Exhibit 1 for Cisco’s financial performance.) Only two other companies, Intel and Microsoft, have ever matched this feat. Perhaps even more impressive, on July 17, 1998, just 14 years after being founded, Cisco’s market capitalization passed the $100 billion mark (15-times 1997 sales). Some industry pundits predicted that Cisco would be the third dominant company—joining Microsoft and Intel—to shape the digital revolution. Don Valentine, partner of Sequoia Capital and vice chairman of the board of Cisco,2 was the first to invest in Cisco; he took a chance on the young company when other venture capitalists were more cautious. One way Valentine protected his $2.5 million initial investment was by reserving the right to bring in professional management when he deemed it appropriate. 1 Transmission Control Protocol and Internet Protocol, together known as TCP/IP, provided a robust standard for routing

messages between LANs and created the potential to connect all computers on an ever-larger Wide Area Network (WAN). 2 Don Valentine was previously the outside executive chairman of the board of Cisco. Cisco has maintained its chairman of the

In 1988, Valentine hired John Morgridge as CEO. Morgridge, an experienced executive in the computer industry, immediately began to build a professional management team. This team soon clashed with the founders and, after...

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...1. Cisco suffered from inertia when an attempt was made to engage business management in selecting software for their individual areas, and/or agreeing to participate in the ERP implementation project. List and explain reasons why management would hesitate to become engaged in the IT process/project.
Below are reasons Cisco hesitated to take on an ERP project:
a) Fear of decentralization
b) Fear of “mega-projects” that ERP implementation often becomes
c) Disruption to the business
d) Need for strong internal team and strong partners
e) Balancing standardization versus proprietary functionality
f) Cost
Fear of decentralization
Cisco’s CEO believed that Silicon Valley firms had a tendency to decentralize too rapidly while not appreciating the functional organization’s ability to grow. In this case, Cisco had many decentralized divisions, whereas the ERP solution would drive centralization.
Mega-projects
As the name implies, a “mega” project is a large project which draws a large amount of resources in order to complete. Such projects also usually entail long and complex implementation schedules. In this case, a prospective ERP solution was tasked with conjoining vast and different functional business teams in a fast moving technology-based company — a complex endeavor.
Disruption to the business
Cisco...

...﻿CiscoSystems, Inc.: ImplementingERP
Introduction
CiscoSystemsInc. was founded in 1984 by two of Stanford University’s computer scientists. In 1990, a matter of just six years from the start-up date, Cisco became publically traded. With the massive growth of Internet Technologies, demand for Cisco products increased dramatically, resulting in Cisco dominating the marketplace. The contributing factor to Cisco’s dominating presence in the market is due to the company’s primary product, the “router”. This is a combination of hardware and software that acts as a traffic cop on the complex Transmission Control Protocol and Internet Protocol (TCP/IP) networks that make up the internet as well as corporate intranets. TCP and IP networks provided a robust standard for routing messages between LANs and created the potential to connect all computers on an ever-larger Wide Area Network (WAN).
Financially, the company experienced consistent growth from July 30, 1995 up until July 25 1998. Using figures provided in Exhibit 1 of the case study, it can be calculated that Net Sales increased a whopping 279% from 1995-1998. The year 1997 proved to be a milestone for the company. It was the first year for the company to feature on the Fortune 500 list. Cisco was ranked among the top five companies in...

...CiscoSystems, Inc.: ImplementingERP
- Himabindu Donga
At the start of the case, Cisco's information systems are failing, yet no one steps forward to lead the effort to replace them. Why is this? Why were no managers eager to take on this project?
The managers at Cisco were apprehensive about the risk involved in converting the existing legacy systems with ERPsystems. They were worried because they thought that the implementation of ERPsystems would turn out to be a â€œmega projectâ€ consuming lot of time and resources. Also, they preferred not to choose ERPsystems in order to maintain Ciscoâ€™s strong tradition of standardization and consistency in budgetary structures which were in place in Cisco. The managers who were asked to make their own decision regarding the software packages were not ready to try any packages individually as they considered it a huge risk financially and in terms of time and so they preferred to keep going with their existing legacy systems by updating/repairing it when needed until it completely failed.
Cisco was highly successful with its enterprise resource planning (ERP) effort. What accounts for this success? What were the most important things that...

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Harvard Business Case Analysis
CiscoSystems, Inc.: ImplementingERP
Management Information Systems
2014 SU – 18531 - MGMT 6352
Christine Nada
July 30, 2014
Table of Contents
Executive Summary………………………………………………………………….. 3
Case Synopsis………………………………………………………………………... 4
Strategy Analysis…………………………………………………………………….. 5
Problems in Business Processes and Operations…………………………………….. 6
Firm Based Value Chain Model……………………………………………………... 7
Model Application…………………………………………………………………… 7
Implementation Opportunity Analysis………………………………………………. 9
Implementation Effectiveness……………………………………………………….. 11
Conclusion………………………………………………………………………….... 11
References…………………………………………………………………………… 13
Appendix…………………………………………………………………………….. 14
Executive Summary
In 1994, CiscoSystems, Inc. was on the verge of an internal breakdown. The company experienced exponential growth in response to businesses’ demand for Internet technologies and data systems. Unfortunately, the UNIX-based software package the company used at the time couldn’t keep up with its sudden growth. After a system failure that caused Cisco to shut down for two days, the management team decided to proceed with plans to implement a new ERPsystem. This paper...

...Assignment 3
Case Study
CiscoSystems, Inc: ImplementingERPCase: CiscoSystems, Inc. ImplementingERP, 9-699-022
Reading: Thomas H. Davenport, “Putting the Enterprise into the Enterprise System,” Harvard Business Review (July-August 1998): Reprint 98401
Putting the Enterprise into the Enterprise System
by Thomas H. Davenport
Enterprise systems appear to be a dream come true. These commercial software packages promise the seamless integration of all the information flowing through a company—financial and accounting information, human resource information, supply chain information, customer information. For managers who have struggled, at great expense and with great frustration, with incompatible information systems and inconsistent operating practices, the promise of an off-the-shelf solution to the problem of business integration is enticing.
It comes as no surprise, then, that companies have been beating paths to the doors of enterprise-system developers. The sales of the largest vendor, Germany’s SAP, have soared from less than $500 million in 1992 to approximately $3.3 billion in 1997, making it the fastest-growing software company in the world. SAP’s competitors, including such companies as Baan, Oracle, and PeopleSoft,...

...Case Study Report for Ciscosystem, Inc. ImplementingERP
Team Members: Nick Qiao, Ginger Yang, Cynthia Lai, Wellington Chou
BACKGROUND
* Cisco Company
Cisco was set up in 1984 and developed into one of the top companies in the world. Its main business was related to the network which remained in IT industry. In this industry, the competition was fierce. Cisco faced competition from rivals such as 3Com, Nortel, Lucent etc. To strengthen its market position, Cisco integrated the strong spirit of innovation in both technology and management which represented the value of Silicon Valley. The talents in Cisco can be addressed as IT expert and elite as Cisco itself was attractive enough for the young and smart. As we mentioned above, the company’s IT background and its company innovation culture helped to launch the ERPsystem in a short time period. Besides the IT talents the company had actually became a big advantage when Cisco began to choose manpower within company for the ERP implementation team.
* the Management Team
In 1988, John Morgridge was nominated as the CEO of Cisco who was an experienced executive in the computer industry. With the departure of the two founders in 1990 due to the IPO, Morgridge was free to...

...upgrade the existing information system by implementingERP when the company encountered a major shutdown for two days. One reason the project became successful was because of internal recruiting. The team consisted of the best business people. The company just did not rely on IT department, instead IT and business people worked together to meet the core objectives. The estimated costs and time to complete to the project matched closely with the initial estimation which is a key attribute of a project.
Another competitive advantage Cisco had was the purchase of an unusual contract. Both Oracle and other hardware vendors agreed to contracts for long-term functionality of the software and hardware. Because of the promised capability, the vendors bared the costs of fixing the equipment. This action resulted in a decrease in total project expenditure.
Cisco went through many issues during their implementation of ERP through three phases of CRP; which is not inherently unusual when a company goes through the testing phase. However, the company encountered major challenges when the new system lacked the capacity to process the required load and make modifications.
Being a Fortune 500 company, Cisco faces high level of competition. Since it is a leader in the industry, there is always a threat from mergers and acquisitions. Moreover, there is a...

...CiscoSystems, Inc.: ImplementingERPCase Summary
This case describes the deliberations, process, problems, solutions and outcome of CiscoSystems’ implementation of an Enterprise Resource Planning (ERP) system. In 1993, Pete Solvik, CiscoSystems CIO, was convinced that the company needed to move away from its UNIX-based software package in order to prepare the company for growth. Initially, he was inclined not to consider an ERP implementation, concerned about the overall costs and scope of such a project. However, in 1994, after a major crash of Cisco’s legacy environment, Solvik concluded that not only should they initiate a major ERP implementation, but that they should do it all at once rather than in phased manner. Solvik and his team secured KMPG as its integration partner, and KMPG aided the team in narrowing the candidate software packages to Oracle and another player in the ERP market. Due to its strength in manufacturing capability, its promise to develop the ERP functionality over the long-term, and its proximity to Cisco, Oracle was chosen, a mere 75 days after the inception of the project. With Oracle chosen, Solvik and his team needed the approval of Cisco’s board to proceed. At an estimated cost...